The Next Wave of Hospital Innovation to Make Patients Safer, is the title of a paper published by the Harvard Business Review in August of 2016. In the article, the authors argue convincingly that the age of major technical innovation to preserve patient safety is over. Furthermore, that the wave or process improvement and the creation of standardized work has taken patient safety as far is it will go. The next wave of innovation will come from, “ paying attention too how individuals interact with one another and organize their day-to-day work”. They go on to say that health care organizations will have to monitor “actual behaviors, practices, and interactions that unfold between people as they care for patients and manage the organization”.
These statements, in our view, only confirm the validity of seeing leadership as a system so that the system can be designed to produce a desired outcome.

If patient safety is the desired outcome, making the primary purpose of a leadership system will turn the entire leadership structure toward this objective. The authors call it “high reliability organizations” and from their descriptions this means organizations that focus on the interactions of core organizational elements – the workforce, information and patients. An organization that is highly reliable sounds like one where all systems are structured and organized to achieve a principle focus, vision, or mission. This will take a leadership system that is similarly focused.

Our core belief is that leadership is a system. It meets the three criteria that Donella Meadows (and others) uses to identify a system:
1. Critical elements (workforce, customers, and assets);
2. Observable interactions (relationships); and
3. A core function or purpose.

However, a leadership system is clearly not a circulatory system where elements interact based on chemistry. Nor is a leadership system a watch where the elements interact mechanistically. Nor is a leadership system a data system where critical elements interact based on the rules designed by software developers. A leadership system is a social system where the great “me” tends to be at the center.
Peter Stroh in his book Systems Thinking For Social Change: A Practical Guide to Solving Complex Problems, builds on Meadows definition by suggesting that a system is defined not by any function or purpose but a desired function or purpose (uses the word ‘outcome”). This is a critical development in understanding leadership as a system. As a system, leadership should be about the purpose or outcome that is… desired, or intended, or designed. It is also a social system because human beings are involved. While some compare human systems with a beehive (system) humans clearly operate in the world of free will, selfishness, learning, and a capacity for complex thought. Conversely, bees with a brain that is little larger than a pin head operate according to what has been encoded into their DNA with little capacity for learning and apparently need no leadership at all
In our research, we are seeing that organizations which identify an outcome or purpose of their leadership system, enjoy long-term growth and sustainability. For example, in 2000 the SSM Healthcare System won the national Baldridge Quality Award for health care. At the time they had 22,000 employees, 5000 physician/providers, acute care hospitals, nursing homes, outpatient facilities, and clinics. Their application suggest a strong of purpose or outcome … individual leaders are responsible for the communication and deployment of SSM’s mission and values. From here, SSM continued to grow and the CEO did not resign until 2014 when she retired.
The iconic Salvation Army has a similar outcome or purpose of their leadership system – execute on the mission which is preach the gospel of Jesus Christ and to meet human needs in His name without discrimination. The entire leadership system of the Salvation Army is to produce this mission.
In a drastically different kind of organization, the New York Mafia or Costra Nostra as it is sometimes called, has a clear and compelling purpose for its leadership system – protect the “family”. Members of the “family” put their own interests, even their own life as subordinate to the larger “family”. While the mafia certainly preyed like sharks on the public, it would be hard not to acknowledge their success. For over 70 years they dominated their competitors and become a shadow government raking in billions of dollars a year through multiple changes in senior leaders, while government authorities and even the FBI knew nothing of their existence.

A key resource in a leadership system is information. The old saying “Information is power” is certainly true and many leaders use information well. Way more leaders use it protect their power and kingdom. In every organization I have been involved with, there is always someone who wants to pretend that they have access to a secret source of information. It’s a power game. But what if the leadership system, provided unencumbered access to all information related to performance?
I frequently get into discussions with clients about how to motivate workers to higher performance. I have struggled with this myself. One solution for leaders is to make information more available and transparent. Donella Meadows, in her iconic work, Thinking Systems, recounts the effect of the 1986 Toxic Release Inventory. This was a piece of Federal regulation that required U.S. Companies to report all hazardous air pollutants released from their factories. With no further regulation, no Federal club to manufactures, hazardous emissions began to drop. In 1988 the initial data became public and 2 years after that there was a drop in hazardous emissions of 40%. It seemed manufacturers were more concerned about public perception (resulting from the free flow of information) than a threat of a Federal lawsuit.
I was recently talking with a Senior Medical Officer (SMO) from a small healthcare insurer. He told me how he was able to motivate their primary care physicians to follow up their diabetic patients and their A1C tests. Every physician was sure 75%-80% of their diabetic patients were having their Hemoglobin checked at regular intervals. They were wrong. According to the SMO it was down around 40%. He had several choices, but his approach was a basic understanding of competitive human nature. He simply published the actual results by physician. Within a few months, the actual results came up to 75%. Information, simple actual results proved more effective that financial incentive, meetings, reminders, or threat. That is the beauty of a system.

Fifty-five pages, single spaced 10 point font, 2 column format and 165 graphics. This is a Baldridge application for a small rural hospital west of Olympia Washington. In adopting the Baldridge excellence framework they have gone on record saying, “we want to become the best”. Facilitating the discovery, identifying their systems and processes and then writing the document was a privilege. Exhausting for sure. Five and a half months of workshops, 4-5 complete rewrites, hours of edits, checks and double checks. Still bound to be a few errors. Frustrating but the lessons are massive.

Baldridge is brilliant. I have been in the Baldrige world for six or seven years. With each touch of the Baldrige system I am more aware of its brilliance. Nothing is more comprehensive, demanding, or relentless in pursuing excellence than the Baldridge framework.Excellence is not a mystery. Baldridge takes the mystery out of the pursuit. With the final edit their next step in the journey is crystal clear. Every health care organization is swimming in data. They are paddling as fast as they can a river of numbers. A myriad of regulatory, oversight, government and private organizations require, gather, and assemble mountains of data for public consumption. Much of it is buried in data warehouses where the statistical relevance is debated by some who want to resist change and others that want to prove preconceived notions about health care. But the numbers are there. This organization’s next hurdle is lining up their data with their vision. When they do this, look out.Baldridge promotes systems thinking. Having worked with this hospital for a year in developing a formal leadership system, it is clearer than ever that health care is a web of interconnecting systems that must be integrated if the cost of health care is ever going to be contained. This hospital is the primary health care provider in a county of high unemployment, high rates of drug & alcohol abuse, and high poverty. Three years ago the county was ranked #33 out of 39 counties for population health. Today they are at #28. Sounds like a minor advance but they have moved the dial on a clock that is hard to move. By recognizing that medical health cannot be separated from behavioral and social health and by partnering with social service organizations and even competitors this little hospital is making an impact. They have begun to integrate social, behavioral and medical health care delivery. They have recognized that treating the cause of illness is immeasurably cheaper than treating the symptoms of illness. The result is that their patients are healthier, at a lower cost and enjoy greater access.
Baldrige provided the framework for excellence. They provided the vision.

In October of 2016, the influential Harvard Business Review published two articles on the failure of leadership development. The first, titled Developing Employees, Why Leadership Development Isn’t Developing leaders. The second, Spotlight On Building the Workforce of the Future – Why leadership Training Fails-and What To Do About It. According the authors of the former, American corporations spent $160 Billion in employee training and education in 2015, and received little of value.
The problem seems to be threefold:

Senior leaders and HR departments seem to believe there is a causal relationship between employee training and organizational transformation. A belief that has never been justified;

The training itself. Too much training is classroom learning that is removed from the actual work experience; and

The systems are unyielding.

Both articles spoke to the “context” and “systematic context” or an eloquent way of saying that training was not aligned with organizational systems. One article was clearer, “the individuals had less power to change the system surrounding them than the system had to shape them”. Exactly! Systems are virtually always stronger than an individual. So, spend billions on training and nothing on systems development and … perfect scenario to waste a lot of money.
In our view, the solution is not to change the training but to change, or more accurately, design the system. When it comes to leadership, design the leadership system like we would any other system. Applying systems thinking to leadership we can articulate the major components of a leadership system to be:
1) Relationships;
2) Resources;
3) Rules
Structure around a primary focus or intent.